In the fourth of a series of articles on bank fees, Matt Skinner looks at the mortgage fees the major banks charge

Home loans are comfortably the biggest chunk of bank lending. And you guessed it, home loans typically come with fees attached.

A key one to keep in mind is the low equity margin or low equity fee banks charge borrowers taking out a home loan who have a deposit, or equity, worth less than 20% of the loan. These fees from the big five banks are detailed in the table below.

It's also important to remember that banks may charge you a break fee if you break the fixed-term contract of your mortgage. For example, if you have a fixed mortgage for two years and you decide after a year to refinance with another bank, or pay off your loan early, you will probably have to pay a break fee. Such fees, or early repayment costs, are a bank's way of recovering the interest they expected you to pay over the term of your loan.

Below are additional home loan related fees charged by the five biggest banks, including some information on break fees.

ANZ

ANZ media team says, "For floating loans, there is no early repayment fee. There is a minimum amount you can repay of $100 or the residual balance of the loan."

"For fixed loans, there is a minimum amount of $1000 that can be repaid or the remaining loan balance; however early repayment recovery may apply."

For low equity premiums see the table above.

The ANZ flexible home loan has a monthly account fee of $12.50. The unarranged overdraft fee is $3.

There is a discharge or execution fee of $100 and a default notice fee of $175.

ASB

ASB has a low equity margin (LEM) that is charged as an additional interest amount added to the interest rate on your loan. The actual LEM charged depends on the loan-to-value ratio (LVR) which is calculated as total borrowings divided by the total value of the security property. For low equity margins see the table above.

When you apply for a new home loan at ASB there is a loan processing fee of $150.

When you apply for a new home loan to build or for major property renovations the fee is $400.

When you increase the amount of an existing home loan it costs $99.

If a home loan is approved and you then make changes to your home loan that requires new documents to be prepared it costs $50.

There is an Orbit and Orbit FastTrack account monthly base fee of between $6 to $24.

This is based on the limit where up to and including $100,000 the fee costs $6, Above $100,000 and up to and including $250,000 the fee costs $12, Above $250,000 the fee costs $24.

When you request a copy of your loan history held by ASB the cost is $20 per hour.

The alterations to the security fee is $125.

There is a change 'parties to loan agreement or owners on title' fee which costs $125.

There is a registrations affecting land titles fee which costs $125.

The priorities fee, when you request changes to the memorandum of priority, is $125.

The settlement statement fee, when your solicitor requests a settlement statement, is $35.

The urgent request fee, to fast track the process, is $25 per request.

The early repayment adjustment administration fee, when you change (rate break) interest rates or pay back your home loan in full, is $10. There are costs attached called early repayment adjustment costs which vary based on your home loan, the calculation for which isn't included on the ASB website at this time.

The local body rates demand notice fee, when a repayment is made on your behalf, is $20.

The loan demand fee, when ASB has to write to you due to the preparation of a formal demand for the repayment of your outstanding debt, costs $125.

BNZ

BNZ charges a low equity interest rate that applies to all loans with less than 20% equity, as per the table above.

Setting up a personal home loan costs up to $150

To top up your loan, when you apply to increase your overall home loan borrowing, costs up to $100.

Redocumentation if required costs $50.

It costs $25 each time BNZ has to pay council rates for your property on your behalf.

The Rapid Repay revolving home loan has a $2 monthly base fee.

The Mortgage One revolving home loan has a $2 monthly base fee.

Preparation of Deed of Lien, a form of security interest granted over an item of property to secure payment of a debt, is $25.

Preparation of agreements, such as general security or specific security, is $50.

Discharge or partial discharge of agreements, such as Mortgage, Debenture, General Security, Specific Security, is $40 per deed.

Execution of Memorandum of Priority of Mortgage is $10 per memo.

Any other deed or security release is $30.

The rates arrears fee is charged $25 per default.

BNZ has a guide to how it calculates rate break costs on page nine of this pdf.

Kiwibank

For low equity premiums see the table above.

When Kiwibank demands payment of all amounts outstanding under your home loan because you are in default it costs $25.

When Kiwibank pays local authority rates due on security provided for your home loan it costs $12.

When you ask Kiwibank to fully discharge your mortgage or security it costs $35 per request.

When you ask Kiwibank to partially discharge your mortgage or security it costs $75 per request.

When you ask to split or combine existing loans or change the type of an existing loan it costs $25 per change.

Changing the identity of the borrower, changing the identity of the guarantor, changing the identity of the owner of the security, or changing the security costs $50 per change.

Where Kiwibank changes multiple existing loans, the fee applies per changed loan.

When you ask Kiwibank for new lending on a new loan or an existing home loan, or you are increasing (topping up) an existing loan it costs $95 per request.

When your solicitor requests Kiwibank’s consent it costs $30 per request.

Kiwibank has a guide to how it calculates rate break costs when you want to change rate on page 15 of this pdf.

Westpac

On interest rates, Westpac  adds a low equity margin between 0.25% to 1.75% depending on the LVR as in the table above.

The rate lock break fee on fixed-rate choice home loans is $30. 

The security discharge fee is $50 per request.

In September Westpac announced it was stopping charging nine fees related to the establishment and administration of loans and overdrafts. 

*You can see part 1 in our bank fees series here.
*You can see part 2 in our bank fees series here.
*You can see part 3 in our bank fees series here.